Investing in technology. More indiscreet stuff from the story vault of Travelstart 13/30

 

Our company
started out with a static html homepage that displayed great flight offers. We
had no money and definitely no knowledge to build anything. There were no
solutions on the market to license so my strategy was simple; just go for it
and hope and pray that in time we could find a solution. This is exactly what
happened. A small Stockholm based firm called Easy T emerged with a client
served based solution that was hooked up with Amadeus XML API. I met their
founder Michael De Jong a couple of times and came to an agreement where we
could license the technology and pay off the once off fees, around 25.000€ over
a period of time.

The day our
first online booking came in I remember Lars shouting out in the office; “Who
is working with THE booking?”. We were suddenly an online agent.

A couple of
years later it was time to upgrade our technology. I met with some ex
colleagues from Mrjet.com, a company I was the cofounder of. They were tired of
being in a large corporate setting after the Ebookers acquisition. I encouraged
them to start their own company. We would be their first customers if they
somehow could bring the source code.

With my
commitment as their first client they negotiated the source code as part of the
divorce settlement and so started MrOrange, the most successful online travel
booking company in Scandinavia. How they managed to bring the code is still a
mystery.

To pay for
the technology we needed cash, which we managed to get one of our suppliers to
come up with. I supervised the whole deal from a pool at the Canary Islands
over phone and SMS. It might sound exotic but truth was that we stayed at this
shitty four star VING hotel. We had just had our third baby and my wife had a
Spanish tummy bug that kept her down for four days. So I juggled three small
kids a sick wife and a deal over a cellphone. But it worked out fine. But we
promised ourselves NEVER to travel charter again.

Working with
MrOrange is everything a successful collaboration is supposed to be. We helped
them get off the ground, they made us successful. We got them more clients and
they used our success to get others started. Suddenly I realized that we created
our own enemies. It made me sick. I hated to see our ideas end up on as a add
on modules on competitors websites so I decided that one day we needed to
invest in our own technology.

In early
2001 I had come in contact with a young talented man; Erik Bosrup who pi.jpgoneered
the Meta comparison business in the world with Luftgrop.com. He ran the site as
a hobby project in the evenings as he went to school. We outsourced some
projects to him and it was all good. I approached him about taking a job with
us but was told I had to wait a couple of years until he had finished school.
So we waited until 2004 when he graduated. To get him onboard we had to acquire
his evening project and it cost us a fortune at the time.  But it has proven to be great little
investment.

We agreed
on hiring five developers and the timeframe for launch was about six months. By
the time we were supposed to launch the whole project had swollen to now
encompass a whole suite of products. Website plus front and mid office all
kinds of tools, bells and whistles. It was an amazing project, to look at but
the guys refused to put it live. Launch was of course delayed and delayed and
delayed. Finally our MD said enough lets launch.

Mid 2005 we
launched and expected bookings to explode. The exact opposite happened. The
whole website was new and no consideration was taken for Googe indexing so we
completely disappeared from the Internet. Lights out! Old customers didn’t recognize
the website and left it. Searches timed out. People got no results and hundreds
and hundreds of other things happened and many more that I was probably never
told of. From the day we launched our team went from being a development team
to a full time bug fixing team with the occasional new features that we tried
to slot in between bug fixes. It was a real nerd project.

It was
impossible to access the website from outside Sweden. And here I was sitting in
South Africa waiting to make a big splash with huge offices and staff. I wanted
to take drugs. On a trip I remember sitting at Schiphol airport wanting to
access our website but it was impossible. When I contacted our dev team I got
the usual, it’s-working-fine-from here-must-be-something-with-Internet-at-airport
bullshit. Of course I had no problem accessing all other websites of this
world. It took us 1,5 year to get back to the same volumes as we had before
launch.  I figured it cost me 1,5
million usd in bottom-line profit plus development costs to have our own
technology. That’s a large shunk of money for a company that’s just come out of
poverty a couple of years earlier.

We have had
this solution now for a couple of years and it has been nerve wrecking from day
one. It has also been by far the most expansive and flamboyant projects I have
ever been involved with. But compare to what I have seen in collapsed e
commerce companies we got away fairly easy.

Choosing to
build instead of license is a matter of strategy or personality. We made the
choice primarily because we wanted independence.  Now we have to invest more money to rebuild, or refactor as
they call it, the system from ground up because in some parts of the world it
is almost still impossible to access the system. But I don’t regret anything
and the boys did a good job.

PS

So what
happened with Easy T? Well it’s a bit of a sad story.  Michael De Jong had prior to Easy T worked with the vultures
at Stockholm based investment firm Traction. Tractions business model was and
probably still is to buy undervalued companies with weak teams and outmanoeuvre
people and sell at a higher price. Michael used his ex employer for  “funding”.  Easy T never got any money from Traction, but they helped
him to raise a couple of hundred thousand €. Traction kept the majority. Easy T
was THE online travel business in Scandinavia for a while until MrOrange came
on board. But by that time Michael was outmanoeuvred. He never got any money
from his shares. And as far as I know the company has shrunk to oblivion. The
url was taken over by Seat24.

I have sympathy
with Michael because without his support our company might never have got off the
ground.

 

Our Readers Comments

  1. A small correction, at that time the EasyT-engine wasen’t based on the xml api. I remember seeing the specs for the xml API some two months before you fired me. It was a pretty odd/fascinating dll that used standard terminal-connections to amadeus running at the back. I remember cause they hanged like twice a day and had to be rebooted. I remember the “no booking in two hours, send me an sms”-solution we used to know when it hanged…

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